To all those who did not dedicate

5.1 Technical Analysis Measures used to Recognize 
Swing Trading Patterns 
To begin with, we typically restrict our selections to stocks that are at least $12 in 
price, having an average (20 day) daily volume of at least 500,000 shares. Since 
market makers can more easily manipulate low price, low volume stocks, we stay 
away from them. 
For long swings we are interested in identifying stocks that are in an uptrend. One 
of the indicators we use is a simple moving average (SMA). A moving average is 
simply the average closing price for a particular number of days. It’s called a moving 
average because on each new day, the current day’s price is added to the average 
while the oldest price is dropped. We typically focus on three moving averages, 
those based on 10 days, 20 days and 50 days. All moving averages smooth the 
price movement and make it easier to identify trends. It is also significant to know 
where today’s price is relative to the moving averages and whether the shorter time-
frame moving average is above or below the longer time-frame moving average.
Two indicators that a stock is in an uptrend are: 
Visit: 
http://www.mrswing.com/
or email: [e-mail] 

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A Practical Guide to Swing Trading by Larry Swing 
• 
Today’s closing price is above both the 10-day and 20-day moving averages 
• 
The 10-day moving average is above the 20-day moving average 
When looking for a long swing, we would like to identify stocks that are 
experiencing a brief decline (pullback). We can identify a 3-day pullback as follows. 
• 
Today’s high price is lower than yesterday’s high 
• 
Yesterday’s high is lower than the high the day before 
We also use a technical indicator developed by Dr. Alexander Elder called the Force 
Index. This index combines the magnitude of the price change with the direction of 
the change and the trading volume. In order to confirm the relative force behind an 
uptrend and a pullback, we use a 3-day moving average and a 13-day moving 
average of the Force Index. The following conditions demonstrate that the bears 
have been winning the short-term battle while bulls are dominating the longer 
frame: 
• 
The 3-day moving average of the Force Index is less than 0, and 
• 
The 13-day moving average of the Force Index is greater than 0 
Another technical indicator we like to use is the Directional Movement Index (DMI) 
that was developed by J. Welles Wilder Jr. It is used to determine whether a stock is 
trending or not trending (i.e., moving sideways). In SwingTracker we provide the 
two components of this indicator – the Positive Directional Index (+DI) and the 
Negative Directional Index (-DI) – along with a 20-day moving average based on 
these two measures (ADX). An uptrend is confirmed if … 
• 
ADX is higher than 30 
• 
+DI is greater than –DI 
Our most successful pattern recognition formulas are available to all visitors (free of 
charge) at 
www.mrswing.com
 in the SwingLab section of the web site. You can 
copy the formulas into SwingTracker and scan all listed stocks at any time.. These 
are the same formulas that provide the MasterSwings recommendations. The 
formulas will be built into the next version of SwingTracker. 
Visit: 
http://www.mrswing.com/
or email: [e-mail] 

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